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State of Michigan Tax Refund Garnishment – Can I Stop a Garnishment Before it is Too Late?

Tax refunds most likely feel like a yearly bonus; a lump sum of money that you can count on to make special purchases, catch up on past due bills, etc. So losing it to a creditor could be devastating and create other budget issues if that money was earmarked for other purposes.

So how do you protect your tax refund and ensure that cannot be taken by a creditor who is threatening or has taken legal action such as a judgment or garnishment? Read on to understand Michigan garnishment laws as they relate to filing bankruptcy to protect your tax returns and begin the process of resolving your debts.

We are here to answer your questions and help guide you to the best path for long term debt resolution and financial freedom. Call one of qualified Michigan bankruptcy attorneys today at 866-261-8282 for a free consultation or schedule online.

How Does a State Tax Garnishment Occur?

State tax refunds are subject to garnishment when a creditor serves a writ of garnishment on the State of Michigan Department of Treasury. If an individual has been served with a notice from the State of Michigan that a writ of garnishment has been received, certain actions can be taken through filing for bankruptcy to keep the creditor from receiving the tax refund.

Judicial Lien and Timing for Filing for Bankruptcy in Michigan

Once the writ of garnishment is served on the State of Michigan, it creates a “judicial lien” on the tax refund in favor of the creditor.

If a bankruptcy is filed within 90 days of the writ of garnishment being served on the State of Michigan, the judicial lien is avoidable and the tax refund will go the individual.

However, if it has been more than 90 days since the writ was served on the State of Michigan and the individual has filed his/her tax return before the bankruptcy is filed, the creditor is entitled to the tax refund.

Filing of the bankruptcy will cause the creditor to issue a release of the garnishment to the State of Michigan.

Therefore, if it has been more than 90 days since the writ of garnishment was served on the State of Michigan, you should not file the State of Michigan tax return until you have filed the bankruptcy and the creditor has provided a release of writ to the State of Michigan.

In this scenario, the State of Michigan will release the tax refund to the individual upon filing of the tax return.

Call the Michigan Bankruptcy Experts to Understand Your Legal Rights

There may be other timing and fact scenarios that may enable an individual to ensure their tax refund is not garnished. Call us today at 866-261-8282 for a free consultation to understand your debt resolution options. For the past decade, our firm has committed our practice to helping our client’s achieve debt relief, debt consolidation and find credit restoration.

We offer free in-office or phone consultations to review your personal circumstances, analyze your situation and advise you on the best course of action. Call us today at 866-261-8282 to speak to a licensed Michigan attorney. We specialize in bankruptcy law, debt resolution, foreclosure prevention and credit repair. We have offices in Detroit, Southfield, Dearborn, Flint, Ann Arbor and Warren, Michigan.

How Can WeHelp You?

Me and my wife want to thank you and your team for all the help in successfully going through the discharge of our Chapter 13 bankruptcy case.

In particular, Cindy Millns has been prompt and responsive in providing all the necessary information. It has been a pleasure working with her.

Nadia & Jamal

(Dearborn, MI)

Thank you for all of your help whenever I called or emailed you regarding my bankruptcy case. You were always helpful and quick to respond on helping me. I truly appreciate the awesome legal service that team at Acclaim Legal Services provided.Many blessings to all of you! Thank you!

Sarah

(Ann Arbor, MI)

When I started at Acclaim they were every helpful in explaining the things i need to know an what all the paper work i needed to get together.. As i went through all the process on my Chapter 13 bankruptcy they kept me informed of all i need to do and to get for them. If i ever had a question they…

Jerome

(Detroit, Michigan)

I would like to take the opportunity to Thank Acclaim for the way that they handled my Chapter 13. A very special Thank you goes out to Cindy, she handled everything in a very timely matter always answer my questions so that I understood.

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